Understanding Stock Classifications

     When reviewing companies on the stock market, the majority of the stocks may be broken down into three classifications.  These are size, industry, value.

Size
     A companies size to investors is often called its market capitalization.  Market capitalization is determined by how many outstanding shares the stock has.  Understand that as a company grows or expands they may offer new shares, split, or buy back shares, so the size of a company may always change.  Just for an understanding large companies have a market capitalization average of the mid-billions, medium size companies are in the low billions and small are in the very low billions to high millions.  About 70% of the current market are large companies.

Industry
     Industry simply refers to what a company does to make its money. Are they in real-estate, vehicle production, technology research or distribution.  There are many industries and various ways companies earn money.  It is important to note what industry a company is in and who their competitors are when looking at a stocks value.

Value
     What value does the company have?  Is it a growth company that is just starting or is it a value company that has been around for a while and has a foothold in a certain industry.  Analyzing this classification of the company will help determine what type of profit you may gain for investing.  Often the most looked at characteristics of a stock for value is if their is an increase of its sales and earnings per share.

Reader Questions #1

1. What stocks are you bullish on?

    I do have my favorites as readers of my blog are aware.  I am a very big fan of Yandex.  They have partnered recently with Google and have maintained being the dominant search engine in Russia and other Eastern countries even as other western search engines tried to move in.  They also have a very developed and complex code because of the Russian language.  Additionally, because of the situation in Crimea I think that the value of the stock is a steal right now.

  I am also bullish on Facebook.  They have had increased revenue growth since their IPO and I do not see it stopping anytime soon.  Even though Mark Zuckerberg said there will be no more acquisitions I do not think they will pas up any opportunity to expand into new tech sectors and reach new countries.  I also believe there are major gains to be made in the marijuana stocks, though most of them are penny stocks right now.  Many states will soon follow Colorado and Washington legalize marijuana just due to the fact that it is a major increase on tax opportunities.  Finally, my dark horse is Single Touch Systems (SITO).  Mobile is exploding right now and they are a company that creates geo-targeted apps and sales apps.  Additionally, they have multiple patents that have been violated by major companies such as Facebook and Google.  I believe that once the patents are recognized they will be acquired by a larger company and receive the recognition they deserve. 

2.  Why do you use Profit-Per-Day as a measurement?

  I use Profit-Per-Day (PPD) and Percent-Profit-Per-Day (PPPD) as a measurement because I believe that it is the most accurate way to determine my investment success.  Everyone always wants to find that stock that you can gain 100% or even 200% profit on, however what if that 100% profit takes 2 years.  Now what if I can get 10-20% profit in 1 week or 1 month.  My investment is working harder for me at during that time.  For example, if I invest $1000 dollars in a stock and the value increases 100% in a year, after 12 months I will have $2000.  Most would consider this a great success and your PPD was $2.37.  Now lets invest $1000 in a stock and assume we make 10% in a month for a small gain.  We will then take the full amount invest again for another month for 10% and continue until we have reach a 100% gain.  If we continue this trend it will take 8 months for us to gain over 100%.  Now looking at our PPD for the first month it will be $32.25.  Understand that you would not always earn 10%, maybe more maybe less, but you can see the value of how hard your investment is working for you.  Ultimately the point of using PPD is for investors to recognize the value of selling a small gain stock over a short period.

3. Why did you create a blog?

  The idea of Invest Like Me, began while I was offering advice to friends on investing.  Ultimately, beginner investors do not want to learn the technicals of a stock or do research on a company, they just want to know what stock to buy and when.  You see this on TV every day, just watch Jim Cramer.  Therefore I decided to share my ideas, my portfolio, and even my trades with everyone on a near real time basis.  Most investing blogs and TV shows tell the investor what company to buy, however they do not say when to buy or what price to buy.  I want to provide the investor this information and let them know that I am not just selling them the information as I am also taking my own advice with the same investments.

How To Define A Profit

     The ultimate goal of an investor is to earn a profit by investing their own money in a company which they believe will grow.  For many beginner investors though, the thought that always comes to mind is what do you consider a profit?  When should I sell?  Remember that any time you make money it is a profit.  I will say that again, any time you make money it is a profit.  Though it may be hard never kick yourself for selling early because once you sell for a profit you now have more money then when you started.  Below is a list of recommendations and advice to keep in mind when determining your acceptable profit.

• Determine if your profit is decided by a percentage or monetary gain.
• Stocks on average shift 5% - 10% a week.  If you are looking for a short term gain use this as a goal.
• Your monetary gain is affected by how much you invest.  5% of a $1,000 investment is not equal to 5% of a $10,000 investment. 
• Determine if your profit gain is going to be reinvested or put aside.
• I do not sell for a loss because you should only invest with money in stocks that you are not afraid to loose, or will not require in a short time.
• Take advantage of a limit or stop limit sell to maximize a gain.  (Future post will cover limit sells)
• Maintain visibility on a group of stocks (20 max). Study, follow, and read-up on these stocks.  Follow their chart, know their average trading level and buy when it is low.

These are a few recommendations for deciding what your profit should be and how to maximize it.  If you have other suggestions post in the comments below.

    

18-March-2014 Market News

What You See And Don't See Buying Tesla
     With U.S. stocks grinding through the first quarter of 2014, many of the last year’s darlings have scuffled. One that hasn’t is up more than 50% year-to-date and trading at more than $236. In a note Tuesday Goldman Sachs analysts upped their price target to $200 but said the stock could be worth anywhere from $66 to $478.  Full Article

Yandex Buys KitLocate
     According to Yandex NV, the KitLocate’s technology can be used in mobile applications and is based on statistical analysis. The technology is useful in determining the right services for users at the right location and right time based on data regarding their movements.  Full Article

Citigroup Fined For Short Selling
     NEW YORK (MarketWatch) -- Citigroup Inc.'s U.S. based brokerage and securities arm Citigroup Global Markets Inc. has been ordered to pay $1.1 million by the Financial Industry Regulatory Authority and the BATS Exchange for alleged short selling securities ahead of participating in five public offerings.  Full Article

SunEdison Receives Latin American Solar Deal Of The Year
     BELMONT, Calif., March 17, 2014 /PRNewswire/ -- SunEdison, Inc., a leading solar technology manufacturer and provider of solar energy services, has been awarded ProjectFinance Magazine's prestigious "Latin America Solar Deal of the Year" award for its San Andres solar power plant in Chile.  Full Article

Walmart Enter Used Video Game Market
     Wal-Mart’s new program will see the video games traded in, sent to be refurbished, and then sold through its stores. This is similar to the service that GameStop currently offers, and subsequently GME stock was substantially in pre-market trading. WMT’s new program differs from GME’s, as WMT customers will have a wider variety of products to choose from when spending the video game’s trade-in value.  Full Article

U.S. Transfers Control Of Internet
     The decision was announced nonchalantly, in trademark Washington fashion on a Friday afternoon: The U.S. government will cede its last bit of control over the Internet.  The government has maintained that influence through contracts with the organization that administers the Internet, a Los Angeles-based nonprofit called the Internet Corporation for Assigned Names and Numbers, or ICANN. But a Commerce Department agency announced Friday that it would relinquish control over ICANN, presumably when its contract expires in September 2015. The office said it wants the group to next convene "global stakeholders" to come up with a transition plan -- a transition to what remains unknown.  Full Article

March Madness Bracket Challenges

     It is that time of year again, March Madness!  As an investor you should never turn down the opportunity for a free investment.  That is how I see this time of the month with millions of dollars up for grab.  Below is a list of websites offering rewards for a perfect or nearly perfect March Madness Bracket.

1.  Yahoo Sports   - $1 Billion for a perfect bracket, $100,000 for the top 20 brackets

2.  ESPN - $10,000 Best Buy gift card

3.  FOX Sports - $1 Million for perfect bracket, smaller prizes for 1-10th place

4. CBS Sports - Tickets to 2015 Final Four

5. Fantazzle - Multiple awards per rounds

6. NBC Sports -  $3,000 first place

7. Sports Illustrated - $1 Million for perfect bracket

8. Athlon Sports - $1 Million for perfect bracket, smaller prizes available

9. Liberty Tax - $1 Million for perfect, smaller prizes available

10. Reese's - Trip to final four in 2015

     If you know of any more free bracket challenges with prizes post them in the comments and I will update my list.

Pros and Cons of Green Companies

     Many investors are jumping on the marijuana boom that is sweeping the stock market due to recent trends of state laws.  This post will give you some pros and cons of the green revolution ignoring any moral beliefs that you may have.

Pros

1.  20 states have legalized medical marijuana and 2 of those have legalized recreational use

2.  Many states have decriminalized cannabis laws and a suspected 4 more states are to vote on legalizing in upcoming elections

3.  Colorado made $2 million from taxes in January off of recreational cannabis and is expected to earn $200 million in 2014

4.  The U.S. government said it will not enforce marijuana laws in states that legalize it as long as the state keeps it under control

5. Current stock prices are low compared to the profit and expansion potential

6. Canada's Medical Marijuana Purposes Regulations (MMPR) programs rolls out April 1st


Cons

1.  As more states legalize cannabis expect governments to take more from taxes and possible regulations

2.  Currently there are strict rules on the growth of cannabis that limit companies impact such as Colorado requires 75% of the cannabis sold to be grown in state

3.  There are many penny stocks have joined the market in an attempt to cash in on this boom

4.  High risk as many companies are entering the market and may saturate prices as more states legalize cannabis

5.  At any time the federal government may force states to reverse laws or take away funding to federal programs


If you are interested in green stocks here are some companies to look into.  PHOT, ATTBF, ENRT, MCIG.

A Step-By-Step Guide To Getting Into Stocks

     Many beginner investors want to invest in stocks because they have some extra cash in their account or they hear about a new company or product that is being released and are hoping to make some money off of it.  Many beginner investors have these ideas of investing but do not know where to start.  If you are one of these many people just follow the steps below and you will become a stock investor.

1. Decide How Much Money To Invest - Before you pick a stock or talk to a brokerage or financial firm you must first decide how much money you are willing to invest.  It is important to discuss this with your significant other as there is a possibility you may loose all of this money.  Once you have decided on a value stick with it.  You may ask yourself what is the minimum that I can invest to learn about stocks before I get fully involved?  I would suggest $1000.  I suggest that because if you make a %10 profit on the stock that is a gain of $100 dollars.  However keep in mind that the financial firm will take some of your investment and gain as a service fee, so you may end up with $85 profit.

2. Pick A Bank Or Financial Firm - If you have a bank that you are currently a member and like I always suggest choosing them.  You can also choose Financial Firms that are only dedicated to investing such as E-Trade or Ameritrade.  I prefer using a bank because I know that they will provide customer service because I use them for other purposes such as everyday use.  I also have the ability to look at all of my accounts in one location.  Additionally, banks have increased their investment capabilities as they now provide stock analysis, charting, and other services that originally made trading firms so popular.

3.  Set Up An Investment Account - Once you have decided how much money to invest and what bank/firm you are going to invest with call them.  Though almost every financial institution will allow you to set up an account online I always suggest calling to ensure you are receiving accurate information as to the rules for the account, trading fees, and other options.  Most banks/firms will have a flat charge of $5 - $10 per transaction, and that is for when you buy a stock AND sell the stock.  Some bank/firms offer bonus cash when opening an account and offer X number of days of free trading.  It is also important to see if their is a minimum balance required on the account, or if there is a discount on the transaction fee if you make a certain amount in a month.  Though it sounds difficult whatever establishment you choose can walk you through the process easily and transfer your money that day.

4.  Invest In A Stock - So you know have an individual investment account with funds available for trading and want to buy a stock.  After you have done your research (tips are in previous posts), on the website select buy stock.  Most sites are the same at this point, you will input the ticker (short code) for the stock and how many shares you wish to purchase.  Next you will be asked what type of buy you want, market, limit, stop limit, stop.  I always suggest to buy limit as a beginner investment.  A limit buy will place the trade if the price of the stock is below your limit value.  Such as if your limit is $10.00, if the stock is below that value you will purchase it.  Once you have selected limit and set your price you will be asked if the purchase is for day only, or good until cancelled.  Choose good until cancelled if you are waiting for a stock price to drop before purchasing, but if you want to purchase at that exact time then choose day.  Depending on the number of shares you will get the option to pick all or none.  Choose all or none and also select do not reduce if available.

5. You Purchased A Stock - Congratulations, if you have followed the steps above you have purchase your first stock.  Visit the site daily for stock updates, tips and guides for investing, and feel free to ask questions in the comments and follow me on twitter @blogilm to see what stocks I am investing in.  Also make sure to check my current portfolio to see what I am currently invested in.

The 3 P's Of Investing

     Many often say that there are two types of investing, investing with the mind or the gut.  In previous posts I discussed looking at a companies financials and technical data in order to make a sound investment but most do not have the time or knowledge to do that.  Therefore many of us rely on our gut judgement when picking a stock that we believe has a bright future.  While doing so we often look at many different aspects such as do I use this company, does the company have a good record, or do they have reliable products.  You may not know you are doing so but in some shape or form you are using the 3 P's of investing, People, Product, and Potential.  Let me discuss a few points on each.

People - The first thing to do when looking at a company is to look at the individuals who are in charge and make the decision.  Do they have a good track record with previous experience?  Are they fully committed to the company and its products or are they just working there for check and a nice bonus if the company does well.  Elon Musk of Tesla is a great example of someone who has experience, as a former founder of PayPal, SpaceX.  He has proved successful in starting business and running them successfully.  Additionally, he knows his products and is involved in their development.

Product - What does the company make or provide to the consumer.  Years ago it was easy to identify a companies product as many were manufacturing companies.  During this time it is a little more complicated as you have technology and social media stocks.  Therefore you must also look at a product in terms of service.  Facebook and Twitter provide a service to its customers, and monetize their service through advertising.  Other companies such as Google has expanded their products from a search engine to gadgets, mapping services, and software.  When looking at a product you must take into account its usefulness, longevity, creativity and future advancement.  What may be the hot item of the year or decade may be something that will be long forgotten in a couple years, such as a cassette or even a CD.

Potential - Ultimately you are investing in a company because you believe it has potential.  Potential can be derived from many factors including, personnel change, a new product, expansion, development or patents.  Additionally, when looking at potential you have to keep in mind short and long term potential.  Apple consistently represents an example of short term potential as every year they release new products with increased capabilities or technology giving the stock a short term run up.  Noodles & Co. represents long term potential as the fast food casual dining chain is only located in 33 states and is opening new stores every month.  The potential for the end result of revenue gain is great as the company expands. 

     When looking at a new company to invest in, it is vital that you do some research and I recommend you focus on these three areas.  Rate one company against a similar company and you will see why some are more successful.  As always feel free to leave comments below and follow me on twitter for real time stock updates.

11-March-2014 Market News

What Is The Right Price For Investing Advice?
     If you’re approaching retirement, chances are good you’re looking for, or are already working with, a financial adviser. Which raises two critical questions: Are you paying primarily for portfolio management or comprehensive financial planning – and do you know the difference?  Full Article

Plug Power Plummets
     Plug Power shares traded at their highest in five years, and the stock was the second most active in U.S. markets in early trading Tuesday.  Then Andrew Left of Citron Research came out and said Plug Power shares would be fairly valued at 50 cents.  Shares of Plug were recently down 25%.Full Article

Cannabis & Biotech Advancers Forge Ahead
     Biotech news and Marijuana's continued rise in growing demand results in companies taking steps to advantage of strategic alliances: OSL Holdings, Terra Tech Corp., Growlife, Medical Marijuana, and InterMune, Inc..  Full Article

Single Touch Recevies Analyst Coverage
     NEW YORK, March 11, 2014 /PRNewswire/ -- Single Touch Systems, Inc. (otcqb:SITO) is an innovative mobile media solutions provider serving retailers, advertisers and brands. Through its proprietary suite of mobile solutions, Single Touch helps its retail and advertising clients engage with customers via their wireless devices. Single Touch has a core operating business consisting of high quality, organically growing revenue, 95% of which is recurring.  Full Article

GE Capital Lends To Taco Bell
     SCOTTSDALE, Ariz., Mar 10, 2014 (BUSINESS WIRE) --GE Capital’s Franchise Finance business announced today that it has provided $80 million in senior debt to BurgerBusters Inc., a Taco Bell franchisee. GE Capital served as administrative agent and GE Capital Markets served as lead arranger and bookrunner on the transaction.  Full Article

Marijuana Bull Market Is Underrated
     Mar 11, 2014 (ACCESSWIRE via COMTEX) -- Carlsbad, CA / March 11, 2014 / The Marijuana Index, or MJX Marijuana Index - the first and only equity tracking index for marijuana stocks, cannabis stocks, and hemp stocks featuring dynamic financial content - experienced a turbulent week between March 3rd and March 7th as several stocks faced unprecedented interest, while others succumbed to selling pressure and possible profit taking (a credit to Alan Brochstein again, who has done a tremendous job with daily updates for the investing public in this sector via "The Daily Dab," and his pay-to-play service 420 Investor).  Full Article

06-March-2014 Market News

Facebook A Threat To Twitter
     Twitter gained nearly 1% to close at $54.83. Janney Capital analyst Tony Wible cited new research that showed a growth in “TV-related multitasking” which he said “signals that both TV networks and social networks have some way to go to drive TV related activity that they can monetize.”  Full Article

Tengion Presents At Roth Conference
     WINSTON-SALEM, Mar 04, 2014 (GLOBE NEWSWIRE via COMTEX) -- Tengion, Inc., a leader in regenerative medicine, today announced that John L. Miclot, President and Chief Executive Officer of Tengion, will present at the upcoming 26th Annual ROTH Conference on Monday, March 10, 2014, at 12:30 p.m. PDT in Dana Point, CA.  Full Article

Less People Listening To Pandora
     SAN FRANCISCO (MarketWatch) — Pandora Media Inc. shares fell more than 5% Thursday after the Internet radio company reported listener hours for February that fell slightly from the prior month and said it would discontinue delivering monthly information on its listenership data.  Full Article

GE Engergy Signs Agreement With New York Power
     SCHENECTADY, N.Y., Mar 06, 2014 (BUSINESS WIRE) --Building on a long-standing business relationship, GE Energy Consulting and the New York Power Authority (NYPA) have agreed to a one-year license arrangement allowing NYPA to use GE’s Multi-Area Production Simulation (MAPS) software. NYPA is expanding its current modeling capabilities to perform high-fidelity nodal analysis and has chosen GE’s MAPS software as the best tool to satisfy its modeling needs.  Full Article

GE States Buses Will Be In High Demand
     CHICAGO, Mar 06, 2014 (BUSINESS WIRE) --Mini buses, limo buses and coaches are expected to be in high demand by specialty vehicle buyers in 2014, according to a new survey by GE Capital, Commercial Distribution Finance (CDF). CDF is a major provider of financing for manufacturers and dealers of specialty vehicles including buses, mobility vans, emergency vehicles and more.  Full Article

Understanding Analyst Ratings

     When looking at a stock you will often see an analyst rating.  These ratings often come from a financial institution and is based on a company's financials, earnings reports, or future products and outlook.  These financial institutions typically give a stock one of 5 ratings indicating what an investor should do.  Many times a rating is increased or decreased when a financial institution raises or lowers a price target for a stock.  Also note that many larger financial institutions have holdings in stock or may want to invest in a company, and though it is not ethical, this may factor into their rating for a stock.  Below is an example of Analyst Ratings for Yandex from the website MarketWatch.

 

 

From worst to best the analyst ratings are as follows:

 





Sell - The investor should sell the stock as the performance of the company has been poor and the stock price is likely to decline in the future.

Underperform - The investor should look to selling some or all of the stock as the performance of the company is not expected to meet expectations.  This may be caused to competition in the market, product issues or other factors such as weather as many stocks have been blaming recently in their earnings.

Hold - The investor should hold their current stock as the performance of the company is expected to meet requirements. Often stocks are a hold while they are continuing slow growth or maintaining their expectations.

Outperform - The investor should look to buy small into a stock or maintain shares as the performance of the company is expected to beat expectations slightly.

Buy - The investor should buy into a stock as the performance of the company is expected to beat expectations greatly.  Often companies receive a buy rating when they release a new product, expand their market, or beat their competition. 


     As an investor you must be aware of these ratings and when a stock has received an upgrade or downgrade as it will affect the price.  Ultimately you want to already be in a stock before they receive and upgrade and sell a stock before it receives a downgrade.  Now as an average investor, without inside knowledge of these ratings it is difficult to time however you can take advantage of ratings.  Every investors ultimate goal is to buy low and sell high so do just that.  When a stock receives a downgrade lowering the price and telling you to sell, do just the opposite, buy the stock.

3-March-2014 Market News

Where To Put Your Money During War
     All things considered, so far the market reaction to Russia's actions in the Ukraine appears better than it could have been. Long-duration Treasury's continue to get bid, but thus far, the buying has not been panicky. Funny how the rising-rate-environment crowd went aggressively silent. To think that bonds won't do well in the face of tapering simply is false and completely disregards history and the reflation disconnect.  Full Article

"Google Of Russia" Shares Skid
     U.S.-traded shares of Yandex, the search company known as the Google of Russia, were down more than 14% on Monday as the crisis intensified with news that Russia has reportedly demanded the surrender of two Ukraine warships.  Full Article

Tesla Model S Taxi Cab
     QUEBEC CITY, QUEBEC, Mar 03, 2014 (Marketwired via COMTEX) -- 4Degrees, the firm behind the largest eco-responsible Internet colocation centre in Quebec City, has sponsored the very first all-electric Tesla brand taxicab in North America, according to Tesla Motors.  Full Article

Lithium Exploration Group On Tesla Batteries
     SCOTTSDALE, AZ, Mar 03, 2014 (Marketwired via COMTEX) -- On Friday, Tesla Motors Inc. CEO Elon Musk publicly discussed their plan to build the world's largest lithium-ion battery factory and locate it in the United States. At Lithium Exploration Group (otcqb:LEXG) we are very excited to see this development from one of the industry giants.  Full Article

Exone Appoints New COO
   NORTH HUNTINGDON, Mar 03, 2014 (GLOBE NEWSWIRE via COMTEX) -- The ExOne Company ("ExOne" or "the Company"), a global provider of three-dimensional ("3D") printing machines and printed products to industrial customers, announced that Timothy R. Pierce has joined the Company effective March 3, 2014 as U.S. Chief Operating Officer.  Full Article

How To Read A Stock Profile Part 2 (Profitability)

     In this post we will continue learning how to read a stock profile, analyzing the Profitability.  Once again the stock is Yandex (YNDX) and the profile is from MarketWatch.

 



 

 

Profitability

 

Gross Margin - Gross margin indicates how profitable a company is.  This value is the total revenue minus the costs of goods sold divided by the total revenue ((Revenue - Cost of Goods Sold) / Revenue).  Gross Margin is the measure of the total profit received from revenue.  YNDX retains $.6475 for every dollar of revenue generated.  Typically the higher the gross margin the better.  You will often see tech companies with a higher gross margin then compared to manufacturing companies.

 

Operating Margin - Operating margin indicates a companies operating efficiency.  This value is the operating income divided by the net sales (Operating Income / Net Sales).  Operating margin lets the investor know what proportion of the company's revenue is left over after paying costs (wages, materials, work area).  Typically the higher the operating margin the better.

 

Pretax Margin - Pretax margin determines the companies profit before tax and in dictates the company's profitability.  This value is the earnings before tax divided by the total sales (Earnings / Total Sales).  The higher the pretax margin the more profitable the company.

 

Net Margin - Net margin indicates a how effective a company is at controlling costs.  This value is the net profit divided by revenue (Net Profit / Revenue).  This value is important because you can determine how effective a company is at controlling internal costs compared to its profit.  A higher net margin is better.

 

Return On Assets - Return on assets tells you how profitable a company is based on its assets.  This value is the net income divided by the total assets (Net Income / Assets).   Return on assets may also be referred to as return on investment. 

 

Return On Equity - Return on equity tells you the rate of return.  This value is calculated by the net income divided by the shareholder's equity (Net Income / Shareholder's Equity).  As with other returns bigger is better.  This value is commonly used as the main measure of a stock's success.

 

Profitability Summary

     It is important to understand the profitability of a stock when comparing similar companies.  Remember that with profits bigger is better, however ensure you look at the valuation (see part 1) of a company also to see how their stock value is corresponds with their profit.

 

 



 

 

 

 

 

How To Read A Stock Profile (Part 1 - Valuation)

     Many new investors get scared of or do not understand the technical side of stocks and investing.  On earnings reports and stock overviews you hear many terms regarding the company's finances and estimates regarding their future. In this post I will discuss the basics of the technical terms to give you a better understanding of what to look for in a company.  This example will use the profile of the stock Yandex (YNDX) which I have previously covered and the profile is taken from MarketWatch on 26 February 2014.

Valuation

P/E (Price to Earnings) - The price of a stock divided by its earnings per share (EPS).  Yandex had an EPS of $1.21 and the current stock value is $37.76 resulting in a P/E of 31.2.  This value is larger then the value above because Yandex did not include extraordinary items (windfalls, write-downs...).  Understand that a stock P/E fluctuates daily as the stock price changes.  Typically if a stock has a high P/E you can expect large growth however the investment is riskier.  Stocks with a low P/E are less risky and have slow steady growth along with a better chance of the company paying dividends to keep investors.  Understand that the lower the P/E the better the value because you are buying more earnings power.

P/S (Price to Sales) - The total market value of a stock divided by total sales for the past year.   If a stock is $10 a share and they have 100 total shares the total market value of the stock is $1000.  If in the year they sold $4000 worth of product their P/S would be .25.  P/S tells you as an investor how much you are paying for each dollar of sales by the company.  This value is good to look at for new companies or companies that are not turning a profit.

Price to Book - This value is the ratio of a stocks price compared to its liquid value (office, computers, paper, cars...).  If the stock is $10 a share and the liquidation value of its assets was $1000 the Price to Book would be .01.  If the Price to Book ratio of a stock is less than 1 you are essentially paying more for a stock than its liquidation value is worth and that if a stock goes bankrupt you should get your money back.  If the value is greater than 1 do not expect your money back.  This value is not used often in investing however be aware of new stocks or old companies that are breaking down.

Price to Cash Flow - This value is the ratio of a stocks price compared to the cash from sale left over after company expenses are paid.  If a stocks value is $10 and the company made $5000 in sales and after expenses had $100 left over the Price to Cash Flow is .1.  This value tells you the investor how much you are paying per dollar of cash left after operating costs.  A low Price to Cash Flow is a good indicator of positive returns.

Enterprise Value to EBITDA - This value is considered the most important when looking at the likely hood of a stock to increase over time. Enterprise Value is the complete picture of a company's worth and the value someone would need to pay to buy them out.   EBITDA (earnings before interest, taxes, depreciation, and amortizations) is a value that does not allow companies to fudge their numbers or representation of their earnings.  Enterprise Value to EBITDA ultimately compares the company's value to how much profit is produced so a low EV to EBITDA is better.  If you see EBITDA to EV then a higher number is preferred.

Enterprise Value to Sales - This ratio is the value of the companies overall worth compared to its sales.  This value is similar to Price to Sale ratio however it is considered more accurate because it incorporates a company's debt and market capitalization.  Typically a lower value is preferred.

Total Debt to Enterprise Value - This ratio is the value of the companies current debt compared to its overall worth.  Investors prefer this value to be zero because companies that have debt must eventually pay them off causing future profits to be reduced.  This value is an indicator of such.

Valuation Summary

     There is no full-proof method of picking a stock based on its technicals however you can gage a stock on them.  Below is a quick-look of what you should look for.

1. Low EV to EBITDA or High EBITDA to EV
2. Low Price to Cash Flow
3. Low Price to Sales
4. Low Price to Earnings for slow growth, High for quick growth

25-February-2014 Market News

Here are some of today's highlights

First Solar Shares Fall
     First Solar shares fell 12% to $50.81 in heavy volume after the company reported earnings of 89 cents a share on revenue of $768.4 million. Analysts surveyed by FactSet expected fourth-quarter earnings of 98 cents a share on revenue of $973 million.  Full Article

Zagg Up After Earnings
     "We are pleased to have finished the year with a strong fourth quarter, our third highest in terms of net sales in the company's history. We also launched our first rugged case under the ZAGG brand, and experienced growth in tablet keyboard sales," said Randy Hales, president and CEO of ZAGG Inc. "2013 was a reset year in which we focused on building a solid foundation for ZAGG moving forward. We made changes in sales, product management, product development, marketing, distribution, operations, customer service, and key leadership roles. All of this was done to position the company to win share strategically and return to growth in the second half of 2014 with well-designed products, clear brand positioning, focused sales execution, and investment in our distribution channels."  Full Article 

Zagg Offers $10 Million Stock For Repurchase
     ZAGG Inc, a leading mobile device accessories company with a brand portfolio that includes ZAGG and iFrogz, announced today the Board of Directors has authorized a $10 million share repurchase. The company paid off the balance on the Line of Credit during the first quarter of 2014, and will use cash from operations to fund the share repurchase in 2014.  Full Article

Morgan Stanley Upgrades Tesla
     Analysts at Morgan Stanley raised their price target on Tesla Motors Inc. to $320 per share from $153, citing potential for the electric auto-maker to disrupt industries outside of its automotive niche, such as batteries and autonomous vehicles. The investment bank has an overweight rating on the stock. The hike in its price target comes amid expectations that Chief Executive Officer Elon Musk will reveal details of his planned "gigafactory" battery plant this week. Analyst Adam Jonas wrote that, "Tesla is an extremely ambitious company for whom flooding the market with fun-to-drive EVs and giving competitors a headache might not be the endgame. Tesla's limited addressable market, a long-time bear thesis on the stock, appears well up for grabs here." Tesla stock rose 6.1% to $231.00 premarket, after closing at a record in the previous session.  Full Article

Facebook Says WhatsAPP Is Worth More Than $19 Billion
     Facebook closed up 3.19% on Monday with nearly 77 million shares traded. The company's Chief Executive Officer Mark Zuckerberg said WhatsApp Inc., which his social-media company agreed to buy last week, was "worth more than $19 billion." The mobile-messaging startup was "a great fit for us," Zuckerberg said at the Mobile World Congress in Barcelona this past weekend. "Already almost half-a-billion people love using WhatsApp for messaging and it's the most engaging app we've ever seen exist on mobile by far."  Full Article

China's Iron Ore Imports Will Rise (VALE)
     China's dependence on foreign iron ore likely will reach new records, according to a top state industry official, which could help underpin slumping global prices but may not provide much of a boost for the world's largest global miners.  Full Article

Understanding Investment Profit

     The ultimate goal for an investor is to make a profit, however there are many different way to value that profit depending.  This article will look at different profit valuations money managers, firms and other investors use along with some of my preferred measuring values.  First we will go over some common terms.  These terms will not cover any investment fees, splits, dividends or other variables.

Profit ($ Value) - How much money you gained from your initial investment.  (Profit = Sell Value - Investment Value)

Return on investment (% Value) - A percentage of your return based on your initial investment compared to the current total for the sale of the stock.  (ROI = Profit / Investment * 100) 

Example:  You invest $500 dollars in a stock at $10.00 per share for 50 shares.  You sell the stock at $20.00.  Your profit is $500 because (($20 * 50) - $500 = $500).  Your return on investment was 100% because ($500 / $500 * 100 = 100%).

     This example is great because the investor doubled his money, however these values do not tell the whole story such as how long did he/she hold the stock.  To analyze this aspect we can use the terms and formulas below.

Profit per day ($ Value) - How much money you gained per day based on your initial investment.  (PPD = (Sell Value - Investment Value) / Days Invested).

Percent profit per day (% Value) - A percentage gain by day based on your initial investment compared to the current sale total.  (ROI = (Profit / Investment * 100) / Days Invested) 

Example 1: You invest $500 dollars in a stock at $10.00 per share for 50 shares and hold it for 30 days. You sell the stock at $20.00. Your profit per day is $16.66 because ((($20 * 50) - $500) / 30 = $16.66). Your return on investment was 3.33% because (($500 / $500 * 100) / 30 = 3.33%).  So your PPD is $16.66 and your PPPD is 3.33%.

Example 2: You invest $500 dollars in a stock at $10.00 per share for 50 shares and hold it for 300 days. You sell the stock at $20.00. Your profit per day is $1.66 because ((($20 * 50) - $500) / 300 = $16.66). Your return on investment was .33% because (($500 / $500 * 100) / 300 = .33%). So your PPD is $1.66 and your PPPD is .33%.

     This example demonstrates how using the length of your investment to measure your profit impacts your view on your investments's return rate.  This next example will demonstrate how using this knowledge of understanding investment profit can and should effect your investment strategy.  Please remember that investment fees and other variables are not taken into account, though they would have marginal impact.

Final Example:  Investor 1 invests $500 in a stock for one year and that stock value doubles resulting in a Profit of $500 and a ROI of 50%. Therefore, for the year, investor 1's investment profit is below.

Profit: $250      ROI: 50%     PPD: $.68    PPPD: .13%

Investor 2 invests $500 in a stock for one year and that stock value increases 10% in 31 days. His current investment profit for this stock is.

 

Profit: $50     ROI: 10%     PPD: $1.61    PPPD: .32%

 

Investor 2 takes his gains and invests $550 in a stock and that stock value increases 10% in 62 days. His current investment profit for this stock is.

   Profit: $55      ROI: 10%      PPD: $.87     PPPD: .16%

 

 

Investor 2 takes his gains again and invests $605 in a stock and that stock value increases 20% in 10 days. His current investment profit for this stock is.

 

Profit: $121         ROI: 20%     PPD: $12.10    PPPD: 2%

 

Investor 2 takes his gains again and invests $726 in a stock and that stock value increases 10% in 262 days. His current investment profit for this stock is.

Profit: $72.60        ROI: 10%    PPD: $.27      PPPD: .03%

 

 

     Let's analyze this example.  Investor 1 did extremely well. His stock increased by 50% resulting in a profit of $250 for a total of $750 at the end of the year.  Investor 2 did not his a big stock but managed to hit some small spikes with his/her biggest gain of 20% which resulted in his/her total profit of $298 for a total of $798 at the end of the year. 

 

 

     I show this example so that you the investor is aware of how your money can work for you in the market.  Often time investors are told to pick a stock and check on it every couple of weeks, months or even years.  It is advertised that over this time your return on invest is most likely going to increase and most investors are content with a 50% profit over a year however you should not be.  Understand PPD and PPPD and look at my 2013 portfolio to see how I used these profit calculations to maximize my returns throughout the year.  

19-February-14 Market News

Here are today's highlights

Stocks Down After Fed Minutes

Facebook Insider Trading

GE Top MidMarket Lender

New GE Lights

SunEdison Earnings Overview

First Solar Sale at $55.00

If you are investing like me you made 7.25% today on the sale of First Solar.  The stock jumped more than expected today and hit our limit.  The stock was held for 35 days which equates to .2% profit per day.

Why "Invest Like Me"?

     The blog "Invest Like Me" was started as a way to show friends and other amateur investors my portfolio and how I trade on the stockmarket.  Often times many investment bloggers and professionals give advice but don't really tell you at what price to buy/sell or ask you to pay to see their portfolio or be added to their e-mails.  I am looking to break that. I have been trading stocks for three years and have been very succesful in my returns.  Though the ultimate goal of investing is you make money, I take it as a personal challenge each year to beat myself in three categories that I will cover in a later post, overall profit, profit-per-day, average percent return.  To maximize the use of this blog first check my current portfolio to see which stocks I am invested in and my current plan for each.  Then follow me on twitter at @BlogILM for stock updates and news.


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13-February-2014 Market News

Here are today's highlights

Stocks Typically Fall on Valentine's Day

Angie's List Falls

Tesla Will Not Close Above $200

GE Completes API Healthcare Acquisition

GE Provides Growth Financing to Texas Roadhouse

Facebook Gives You More Option For Gender

SunPower Gets Wall Street Praise

SunEdison Helps Business In Georgia

11-February-2014 Market News

Here are today's highlights

INVN and STM Settle Patent Litigation

Tesla Hits All Time High

Sun Shining On Solars

Zagg Launches InvisiSHIELD at Best Buy

GE Overview

Why Best Buy Continues to Defy Critics

10-February-2014 Market News

Here are today's highlights

SuneEdison Announces Cost Reduction

Tesla Reaches New Highs

Best Buy Can Turnaround

Organovo Benefits From Other 3D Printing Companies

Zynga Expects Strong Earnings

Yandex Opening New Office in Europe

07-February-2014 Market News

Here is today's highlights

Tesla Picks Up Rdio

Organova Fiscal Results

Twitter Faces Same Problems As Facebook

Are Emerging Markets a Profit

Solar Power Shines at Olympics

GE Authorizes Regular Quartely Dividend

04-February-2014 Market News

Here are today's highlights

J.P. Morgan's Top Internet Stocks  (we have 2 in our portfolio)

The Correction is an Opportunity

Bitcoin Trading Center

Facebook is 10 Years Old

Disney Plans to Slash Jobs

Analysts See Upside for Plug Power

03-February-2014 Market News

Here are today's highlights

Facebook Saving Twitter Ahead of Earnings

Dow Headed for 18,000 by Year End

Yellen Sworn in as Fed Chief

GE Expands Energy Operations

ZLCS Enters MDA

Bulls Vs. Bears Margin Thins

31-January-2014 Market News

Here are some of today's headlines

Don't Dump Because of January

Is There a Big Correction Looming

Zynga Soars

Best Buy Cuts Workers

GE Buys Thermo Fisher Unit

JP Morgan Says Buy Vale

A Closer Look At Yandex (YNDX)

     Yandex (YNDX) is often identified as the Russian Google.  It is the primary search engine of Russia, however recently it has begun to expand its services.  Currently Yandex is the preferred search engine of just over 60% of Russia and is the 4th largest search engine in the world.  Yandex is not just limited to Russia as it is often used mostly by Easter European countries and some parts of Asia. Yandex's expansions include Yandex Wallet, a pay system similar to Google and its recent online deal with Facebook.  Yandex also specializes on online shopping comparison and goods delivery.

     To begin how can one not invest in a company that is compared to Google.  Yandex is growing and has managed to maintain its customer base even with other Internet giants attempting to gain a foothold in their market.  In 2009 Yandex took a step forward in response and opened Yandex Labs in Nevada to focus on the American Consumer.  They have also begun to branch out and expand partnerships, most recently with Facebook.  An even bigger accomplishment is that Fortune has described Yandex's search technology further advanced than Google's.  If anything points to Yandex's success it is that they have turned down offers from a buyout by Google, Yahoo and Microsoft.  They have beat analyst estimates for the past four earning reports and will garner more attention during the Olympics.  The earnings report for YNDX will be released February 20th and I expect even larger growth in revenue.  Below is Yandex's chart for the past year.

30-January-2014 Market News

Here are some of today's highlights

Facebook Mobile Revenue Growth

Celgene Disappointing Earnings

Elon Musk Receives Edison Achievement Award

Potholes Ahead for Tesla

PLUG Power and Organovo Advancing

How To Use Invest Like Me

Are you new to Invest Like Me?  Use these steps below to get started.

1. Bookmark this site.

2. Follow me on twitter at @BlogILM for daily updates on buys/sells.

3. Click on the Current Portfolio tab above and review my current and future stock purchases.

4. Through an investment firm or your bank purchase one of my suggested stocks if the price is currently lower than my buy price.

5. After you purchase the stock, set your Limit sell price.

6. While you wait for the stock to sell, check here daily for highlighted market news.

29-January-2014 Market News

Here are today's market highlights

Fed Makes More Cuts, Stocks React

Organovo Delivers a 3D Liver Early

Yandex Invests in Logistics

GE Invests in Power Generation Services

Facebook Beats Estimates

28-January-2014 Market News

Below are today's highlighted market news

Samsung and Google Sign a Patent Agreement

What Breaking Average Really Means

Yahoo Q4 Revenue Falls

Facebook is Not a Fad

What Buisness Expects from the SOTUA

Wait Longer to Buy the Dip

Down But Not Out Stocks

Welcome to Invest Like Me

Welcome! Invest Like Me is a blog for the amateur investor who is looking for guidance, recommendations, and a no excuse real time portfolio. The current portfolio is what I currently am investing in. Unlike other stock investing sites, TV shows, and money experts I am fully invested in the stocks that I discuss. I will provide updates with my Buy/Sell stocks and show you how I decide how to invest. Feel free to look at my 2013 portfolio for my success in the past and join me for the new year of investing.

***I am not licensed and I can not guarantee you a profit***